Concept Testing“Will the Dogs Eat the Dog Food?”

Testing the Product/Service Concept

What is it? Validating the value proposition

How to do it? Talk to customers

Why talk to customers?

MarketBroad landscape of buyers

SegmentSubgroup with similar needs

CustomerRepresentative of segment willing and able to purchase the product

Medical Market

Private Clinics

Specific Private Clinic

Who is the customer?

Types of Customers

BuyerEnd-usersPartners• Joint development partners• Licensee• Re-seller or distributors

Important to recognize layers of value propositions• Value to the buyer or partner• Value to the end-user or customer

Same or different

Defining Customers and Segments: First Pass*Description Examples

Definers Characteristics that delineate customers into groups with similar needs

Allows measurement of segments

Country or geographic regionSize of organizationInstalled base of other productsProfessional title/occupationAnnual income

Descriptors Non-quantitative characteristics of customer

Role in buying decision processRisk toleranceBenefits soughtMotivations

Context How will the customer use this product?

Location of useApplicationIn conjunction with other productsFrequency of use

*modified from So what, who cares, why you? by Wendy Kennedy

Concept TestingPlan of Attack

Overview

Clearly define the product or service conceptIdentify the type of information neededIdentify who has the informationSelect the best tool(s) for gathering the informationSummarize/analyze information

Importance of product definitionClearly defined product concepts elicit clear responsesDefining the product concept• State the problem that your product is meant to solve• Offer supporting product attributes (features) to add

credibility to the product’s ability to solve the problem• Link features to benefits

o “Rapid file access will increase throughput 2-fold”o “The lighter weight will reduce fuel costs by 30%”

Note: For some, concept testing may be more exploratory• Using customer input to help shape/refine product

concept

Step 1: Identify questions to be answered

What are the most pressing questions I need to have answered?

Value-network questions• Who are the customers with this problem?• Are they solving the problem today? How?• How significant is the problem? What is the

economic impact?• What is it’s impact on others?

Step 1: Identify questions to be answered (cont)

Product-specific questions(value proposition)• How relevant is the product to the customer’s needs?• What is the perceived value?• Need-to-have vs nice-to-have?• What is the price sensitivity?• How unique is the concept?• Are there any certifications or approvals prior to

purchasing?• What is the purchasing process? Who is involved? • How products evaluated?

Industry/Market Information• Trends in the market• Current/Emerging competitors• Regulatory issues

Step 2: Where to get the information?Primary Sources (people)• Product-specific information• Examples

o One-on-one interviewso Focus groupso Quantitative surveyso Field tests

Secondary sources (reports)• Broad market information • Examples

o Internet searcheso Market research reportso Analyst reportso Polls and surveys

Step 2b: Who to talk to?

Customers• Buyers• End-users• Partners

Quasi-customers• Thought leaders• Early adopters• Industry experts

o American Society of Association Executives Gateway: find industry associations to contact for info.

o ThomasNet: list of industrial trade associations

Defined by market segment(s)

Step 3: Choose the information gathering toolAdvantages Disadvantages

Personal interviews

Allow more 'depth'

Allow modification

More flexibility based on customer response

It can take a long period of time to arrange and conduct.

Some respondents will give biased responses when face-to-face with a researcher.

Online surveys

Cost savings

Quick access and response time

Easy to cross geographic boundaries/international

Possibility for large sample sizes

More amenable to data analysis

Access to large target audience can be difficult or expensive

Low response rateSelf-selection can bias results

Step 4: Analyze Information

Look for consistent, significant trendsPossible outcomes• Confirm and support concept feasibility• Need more information• Modify concept based on valid feedback• Identify a brand new opportunity• No-go

Interviews

Interview TipsInterviewees• Spend time up front finding the right people• Leverage the network (personal, coaches, inventors)• Associations

The Questions• Be specific, when necessary

o “If you were to use this product today, how much time would you save each week?”

• Be general, when necessaryo “What trends over the next 10 years will most affect your buying

decisions”• Be quantitative

o “On a scale of 1 to 10, with 1 being low and 10 being high, how would you rank the value of this product”

o Ask quantitative questions across all interviews

Interview Tips IIThe Interview

• Prepare questions ahead of time and create worksheet• Keep it short and simple• One person leads the interview

o Useful to have several people attending• Ask good follow up questions to explore and probe

o “Why do you say that?”o “Could you elaborate on that point”

• Be on the lookout for great quoteso “Every doctor I know would use this”o “This is one of the most innovative products I’ve seen in years”

Balance flexibility with consistency• Questions may need to be changed after first several interviews• But you need consistent questions across interviews to spot

trends.

Surveys

Onilne Survey Tools

Google DocsSurvey GizmoSurvey MonkeyZoomerangQualtrics (MBAs)Many more…

Getting Respondents

Your network• Email• Facebook

CraigslistOnline tools offer distribution for fee• Is it worth $100 to test your idea?

Facebook ad

Examples

Example 1

Fitness machine for children• “BowFlex for Kids”• Combines strength training web portal to track

progress and win prizesTarget markets• Parents with competitive children• Middle schools• Gyms and fitness centers

Market/Customer DefinitionParents Schools Fitness Centers

Definers Parents with middle-school aged children playing in competitive sports

Middle schools with after-school sports programs

Gyms and fitness centers

Descriptors Parents who push children to succeed in sports

Parents who live vicariously through children’s athletic success

Highly competitive coaches and teachers

Schools with strong parent support

Private schools?

Gyms with large parent membership

Gyms that integrate children into activities

Context Use the product at home

Input from coaches?

As part of the athletic training program

In the gym alongside parents

At home as part of the membership

Questions to be answered

Do middle school parents and coaches care about strength training?

What would motivate a parent to purchase the product?

How do middle schools fund athletics?Which of these three market segments should be

targeted first?Which sports would be the best fit?Are there any children’s safety regulations around the

product?

Who to ask?

Parents• Friends and family

Coaches• Local soccer league• Middle school coaches• School principles

Gyms• Local gyms and fitness centers• YMCA

Industry experts• Product safety issues

Example 2

Biocompatible gel for time release for drug deliveryApplication: subcutaneous injections of cortisone• Time release provides 2x longer effect

Target market• End user: orthopedic doctor• Development partners

o Cortisone suppliers and manufacturers

Market/Customer DefinitionOrthopedic Doctors Cortisone suppliers

Definers Private practice and hospitals Manufacturers of hydrocortisone

Descriptors Doctors who work in orthopedically active areas (retirement communities)

Longer activity = fewer shots

Incentive to broaden their product line

Context As part of a treatment regimen As part of a product line of treatments

Questions to be answered

What is the average number of shots per patient? Per doctor?

Is increasing the effect two-fold significant?Are orthopedic doctors the only ones who give

cortisone shots (primary care physicians)?If the product results in fewer shots, can the doctor

charge more? If not, is there a disincentive?What symptoms trigger cortisone shot?What partners have the competencies needed?• Regulatory expertise• Reimbursement experience

Who to ask?

Orthopedic doctors• UNC Hospitals

Other doctors• Sports medicine• Geriatrics

Local sales rep for cortisoneElderly

Homework

First pass at defining target market(s)• Name of market(s)• Definers• Descriptors• Context

Questions to be answered• Identify at least 10 questions to be answered• Prioritize them

Sources of information• Identify the people to be interviewed• Match the questions with the interviewees